Financial Engines on Monday unveiled a lifetime income option for 401(k) plans, providing the option through managed accounts.
Financial Engines’ Income+ will be competing with companies offering in-plan annuity options and those embedding annuities in target-date funds.
Jeffrey Maggioncalda, Financial Engines’ CEO and president, said executives began working on the option about three years ago “because we saw (other) products in the market were having trouble gaining traction” with plan sponsors.
The product has three components: an income floor provided by bonds; a fixed-income set-aside that can be used to purchase an annuity outside of the plan; and equities.
Although Financial Engines officially unveiled Income+ on Monday, Aon Hewitt has been offering it to clients since the fourth quarter of 2010. Other large service providers — including J.P. Morgan Retirement Plan Services and Mercer — will offer it to clients later this year, Financial Engines officials said.